Smart Career Plan for Advisors

Most advisors can prepare a customized financial plan for clients with ease. Yet few firms take the time to develop customized career paths for their advisors - even though such human capital management is critical for a growing firm.

I worked at two fee-only planning firms before launching my own. Neither had a defined career track for me to follow. One actually had tried to put a pathway in place, but it was a one-size-fits-all strategy - a vague list handed to every associate trying to advance at the firm, with no thought given to associates' specific skills.

It's hard to fault these firms. Financial planning is a relatively young profession, and we're only a couple of generations removed from its infancy. However, if we want to move past this stage, then firms need to step up.

How do firms go about creating plans? There are three main elements that go into developing a comprehensive career track:

* Know your staff.

* Understand your firm.

* Customize your plans - and be ready to keep revising them over time.

KNOW YOUR PEOPLE

First, you need to understand your staff members' career goals and workplace skills intimately. I'm not talking about superficial office conversations. Learn whether they aspire to work in detailed investment analysis.

Can they handle a conversation with a grieving widow professionally? Find out whether an associate wants to manage staff or sees herself as a rainmaker. Do younger staffers aspire to be your successor, or want to remain planners with core sets of clients? Without this knowledge, you will never have a content staff working at its full potential.

Keep in mind that career tracks rarely work in isolation. For a large team, for instance, they must be designed to work together and help grow the organization as a whole.

THINK BIG PICTURE

The next issue to grapple with: Understand where your firm is now and which of its strengths will propel it forward. This knowledge should be broader than merely your AUM, your staff size and your years of experience.

Answer these questions about your company:

* Which clients do you best serve? The answer should not be "all of them." Define your ideal clients. You may even find you have multiple niches.

* How are you different from the hundreds of other planning firms across the country? If a spectacular answer doesn't easily come to mind, then you likely have a problem.

* Why do you want to grow your company and develop more advisors? Growth for growth's sake, or even growth aimed at fetching a higher sale price, are inadequate answers. Find a deeper meaning if you can.

As a manager and leader, you need to understand the objectives of your company. Your company goals must have intrinsic meaning behind them, or you won't be able to understand the skills you need and set clear paths for the members of your team.

Look back on your own journey as you built your firm, your team, or your career. Did you start as a solo owner, partner, successor or something else?

Chances are you dreamed of something early in your career that may look different from what your role is today. Why should that not be true for your staff? As they develop and your company grows, career tracks will need to be adjusted regularly to adapt to these changes.

CUSTOMIZED APPROACH

Let's say you've accomplished all these goals and are ready to start putting together custom career tracks for your staff. (Full disclosure: In addition to my planning practice, I have a consulting firm that helps practices develop these career paths.)

First, think about the timeline of the person you are designing for. For entry-level associates, you may want programs that help them become competent planners who can manage books of clients. An experienced planner may want a path to becoming a partner, which would allow you to execute a succession plan.

To keep most career tracks manageable, use a timeline of three to five years - short enough so that you can still provide details.

Next, assess the current skills of your employee - and compare those against the skills that person will need to successfully reach the end goal. List the skills that need developing, placing them in order of importance. Break them into categories, if that is useful: communication, business development, relationship building, technical knowledge or whatever else is applicable.

Make sure that these skills can be developed over time and are in fact essential to an individual's progress. (If you are developing an investment analyst, for instance, emphasize technical knowledge and internal communication, rather than business development.)

Develop metrics and milestones. When should an advisor be skilled in a certain area? How will you assess progress? And how will you reward that advisor for various achievements?

Set up a support system. What conferences will you send this person to, so he or she can network, learn and bring back knowledge to your firm? What books should your employees read - and who can make sure they are learning and applying their new knowledge? Identify potential mentors as well as colleagues who are going through similar tracks and can provide peer support.

NEXT STEPS

There's a lot to put in motion here, but here are a few more concrete suggestions as you develop your career tracks:

* Have your advisors attend conferences and events that are connected to their niche markets, rather than just attending advisor conferences. Encourage them to learn about their prospective clients by meeting them on their own turf.

* Mandate that each staff member acquire a mentor outside of your company. This may be another advisor, and sometimes this is beneficial - but your employee may also want to choose someone not in the field.

* Encourage your advisors to research their own possible resources - books, seminars, consultants and the like. If you bring everything to the table for them, you may get minimal buy-in. Don't expect your staff to think of everything, however; you may still have to supplement their ideas.

Many firms have already implemented similar processes for their advisors. One such firm, Abacus Planning Group in Columbia, S.C., has been using a document for years that it calls a "leadership pipeline" to chart advisors' career tracks.

"Our documentation of the key elements to succeed in your career journey is a welcome tool for every member of the firm - whether an existing leader developing other leaders or an employee on the first day of the job," explains Abacus founder Cheryl Holland. "We add to the pipeline almost every month. ... Whether dressing for success, communicating for success or measuring success, the leadership pipeline is our go-to document."

By developing this document for all staff, Abacus has defined the specific number of steps needed to progress to each level at the firm.

One caveat: Don't expect a career track to work miracles. You must build a culture within your firm that encourages people to develop their own skills. If your firm's environment is somewhat dysfunctional or, worse yet, hostile, your more skilled staff will show their unhappiness by finding another place to work.

Ultimately, trust the process. Many owners are cautious of putting a lot of time, effort and expense into employees, fearing that more skilled staffers will eventually leave. But if you don't invest in your employees, don't you think they'll be even more likely to leave?

Dave Grant, a Financial Planning columnist, is founder of Finance for Teachers, a planning firm, and Fee Only Consulting, in Cary, Ill. He is also the founder of NAPFA Genesis, a networking group for young, fee-only planners.